When a township applicant completes the township establishment process until the township is declared an approved township, he can finally reap the richly deserved reward for this strenuous effort by marketing and selling the stands in this township which then culminates when the stands are transferred into the name of the purchasers.
The township owner can either dispose of the stands directly to the purchasers, or as it quite often happens in large housing projects like Lufhereng, Savanna City and Leeuwpoort with affordable housing components, enter into a land availability agreement with a contractor. The contractor then markets and sells the stands on behalf of the township owner on condition that the contractor enters into a building agreement with the purchaser to construct a house for the purchaser on that stand.
Prohibition against the marketing and selling of stands in a new township
Prior to the introduction of the Spatial Planning and Land Use Management Act, 2013 (No 16 of 2013) on 1 July 2015 most of the townships which were established in the Gauteng Province, Mpumalanga Province, Limpopo Province and North West Province were established in terms of the Town-Planning and Townships Ordinance, 1986 (Ordinance No 15 of 1986).
Section 67(1) of the Town-Planning and Townships Ordinance, 1986 stated that, subject to the provisions of Section 70, the township applicant or its authorised agents were not allowed to enter into sale or option agreements to dispose of the stands until the township is declared an approved township in the relevant provincial gazette.
This meant that, if the township applicant did not make application in terms of Section 70 of the Town-Planning and Townships Ordinance, 1986 for the written consent to enter into sale or option agreements prior to the publication of the proclamation notice for the township, that it was not possible to market these stands to the public lawfully.
Similar restrictions regarding the marketing and selling of stands in an unproclaimed township were carried forward to the municipalities’ municipal planning by-laws which were introduced in terms of the Spatial Planning and Land Use Management Act, 2013.
Installation of services for the stands before it can be transferred
The public enjoys further protection against unscrupulous private township developers in the sense that the sold stands may not be transferred to the purchasers until the municipality is satisfied that adequate services for the stands to be transferred are or will be available within a period of three (3) months from the date on which the municipality issued a service certificate in terms of Section 82(1)(b)(ii)(cc) of the Town-Planning and Townships Ordinance, 1986:
(cc) the local authority within whose area of jurisdiction the township is situated has certified that it will, within a period of 3 months from date of the certificate, be able to provide the erf with such services as it may deem necessary and that it is prepared to consider an application for the approval of a building plan in respect of the erf.
Section 113(1)(c) of the Town-Planning and Townships Ordinance, 1986 has a similar provision regarding townships which were established by municipalities.
As in the case of the marketing and selling of stands similar restrictions were carried forward to the municipalities’ municipal planning by-laws which were introduced in terms of the Spatial Planning and Land Use Management Act, 2013.
The road less travelled
A township owner is not obliged to only dispose of the serviced stands in his township, there is a further prospect of selling the whole of the township, portion of the township, the remaining extent of the township or a share in in the whole of such land.
Section 47 of the Deeds Registries Act, 1937 (No 47 of 1937) states that the owner of land in respect of which a township register has been opened may transfer by one deed, the whole or any portion of such land or a share in the whole of such land.
- Transfer of township or portion thereof
The owner of land in respect of which a register has been opened under section forty-six may transfer, by one deed, the whole or any portion of such land or a share in the whole of such land: Provided that –
(a) if a portion only of the land is sought to be transferred –
- the transfer shall be passed in accordance with a diagram (to be annexed to such deed) from which shall be excluded all erven on the land represented thereon which have already been transferred, and on which the total area of such transferred erven shall be indicated;
- the boundaries of such portion shall coincide with one or more of the lines of division shown on the general plan and shall not intersect any of the erven shown thereon;
(b) if the remainder of the land is sought to be transferred or mortgaged or otherwise dealt with there shall be produced to the registrar a certificate of remainder signed by the surveyor-general; and [Para (b) amended by s 21 of Act 43 of 1962.]
(c) the deed of transfer shall disclose that the land conveyed thereby has been laid out as a township or is a portion of land so laid out, that such land remains subject to the provisions of the law relating to townships, and, if any public place or portion thereof in such township forms part of the land transferred, that the rights of owners of erven and of other persons to such public place are not affected by such transfer.
This means if the township register is opened and the township is proclaimed an approved township the township owner may sell the whole of the township, or a portion of the township to a purchaser. Where several stands in the township have been transferred already this provision also allows for the transfer of the remaining extent of the township to take place.
This is in effect a way of selling ‘unserviced stands’ in a township but duly packaged as the whole, portion or remaining extent of the township in terms of Section 47 of the Deeds Registries Act, 1937 so that the purchaser takes over the obligations of the former township owner in respect of the stands that compose that part of the township.
The sale of the whole of the township
If the whole township is sold the deal is plain and simple. The intention of the parties is that the purchaser becomes the new township owner and must take over the obligations of the current township owner.
In the sale agreement the property will be described as follows:
The proclaimed Klipfontein Extension 50 Township, including public places, situated on:
Portion 87 (portion of Portion 29) of the farm KLIPFONTEIN 150
Registration Division IR Gauteng Province
Measuring 53,3161 (Fifty-Three comma Three One Six One) hectares
As depicted on diagram SG No 6211/2009 and laid out in erven and streets on General Plan SG No 6218/2009
Subject to the conditions of establishment issued by the Midvaal Local Municipality and the conditions reflected in the proclamation notice for Klipfontein Extension 50 Township.
Section 78 of the Town-Planning and Townships Ordinance, 1986 requires of the new owner of the township to notify the municipality that it wishes to continue with township establishment.
- Continuation of application by new owner
- Where the ownership of land in respect of which an application for the establishment of a township has been made, has changed and the new owner of such land notifies the Administrator in writing that he wishes to continue with the application, the Administrator may, if the application has not lapsed in terms of section 72, 76 or 77 consent to the continuation of the application subject to any condition he may deem expedient.
- An owner who continues with an application in accordance with the provisions of subsection (1) shall, for the purpose of the provisions of this Chapter, be deemed the applicant.
The purchaser of the township must enter into a services level agreement with the municipality in his capacity as the new township owner to take over these obligations from the previous township owner.
The new township owner must then install the services for the stands in the township and only after issuing of the services certificate may these stands be transferred to the purchasers who bought it.
The sale of a portion of the township
The first step in putting this deal together is to identify the specific stands in the township which the purchaser wishes to buy. This list of stands will then determine which part of the township is purchased.
A land surveyor must then be instructed to frame a diagram in term of Section 47(a)(1) of the Deeds Registries Act, 1937 which outlines the portion of the township which consists of the listed erven. The boundaries of the portion may not intersect any of the erven which form part of this portion of the township.
In the sale agreement the property will be described as follows:
Portion 37 (portion of Portion 87) of the farm KLIPFONTEIN 150, now known as a portion of Klipfontein Extension 50 Township (consisting of 120 erven numbered 5000 to 5120 including public places)
Registration Division IR Gauteng Province
Measuring 27,6100 (Twenty-Seven comma Six One Zero Zero) hectares
As depicted on diagram SG No 3541/2021 and laid out in erven and streets on General Plan SG No 6218/2009
Subject to the conditions of establishment issued by the Midvaal Local Municipality and the conditions reflected in the proclamation notice for Klipfontein Extension 50 Township.
The purchaser becomes the township owner of this portion of the township and must take over the obligations of the current township owner in respect of the stands that form part thereof. He must then install the services for these stands in the township before these stands may be transferred.
The other effect of this deal is that the township will now have two township owners, with each township owner holding his erven in terms of separate township titles. The original township owner holds his stands in term of the original township title while the new township owner holds his stands in terms of the new title deed based on the diagram framed by the land surveyor.
The sale of the remaining extent of the township
As with the sale of a portion of the township this deal is put together by identifying the specific stands in the township which the purchaser wishes to buy, which is all the remaining stands not sold and transferred yet by the current township owner.
The land surveyor must then frame a diagram as prescribed in Section 47(b) of the Deeds Registries Act, 1937 which will depict the remainder of the township consisting of all the stands not sold and transferred yet.
The Remaining Extent of Portion 87 of the farm KLIPFONTEIN 150, now known as the Remainder of Klipfontein Extension 50 Township (consisting of 50 erven numbered 5120 to 5170 including public places)
Registration Division IR Gauteng Province
Measuring 13,0034 (Thirteen comma Zero Zero Three Four) hectares
As depicted on diagram SG No 6520/2021 and laid out in erven and streets on General Plan SG No 6218/2009
Subject to the conditions of establishment issued by the Midvaal Local Municipality and the conditions reflected in the proclamation notice for Klipfontein Extension 50
Conclusion
A township owner is not restricted to sell only serviced stands in an approved township but may also sell the whole, a portion, the remainder of the township or a share in in the whole of such land to a purchaser who is willing to take over the obligations of the township owner in respect of the stands situate thereon.
The fact that the purchaser is obliged to take over the obligation to install the services for the erven situate on the whole, a portion or the remainder of the township in terms of a new services level agreement entered into with the municipality allows for such transfer to take place without having to submit a services certificate for these erven. It is only when the purchaser wishes to dispose of these individual stands that the Deeds Office will require the submission of a services certificate for these stands.
“The first step in putting this deal together is to identify the specific stands in the township which the purchaser wishes to buy.”
